THOUSANDS of the ‘most vulnerable’ people in Sheffield are set to lose vital cash support as £4.6 million is cut from council tax benefits funding in the city.
Families living on low incomes - but not pensioners - totalling 30,000 residents are to pay about £200 a year extra as part of the Government’s welfare shake-up.
Sheffield Council today launched consultation on a plan to reduce tax benefit payments by 20 per cent for all working age claimants after learning of the funding cut’s impact.
Town Hall chiefs say it is the only fair way to deal with an ‘unfair’ policy after major budget cuts.
Coun Bryan Lodge, cabinet member for finance and resources, said: “This £4.6m is a big gap that is very difficult for us to make up.
“It will affect some of the most vulnerable people in the city.
“Council tax benefit is paid to people who have a low income and if it’s working age people bearing the brunt it’s going to have a huge impact.
“The alternative is to find £4.6m from the council budget and that would impact on services across the city.
“The Government is localising the cuts and forcing them on to local authorities.”
From April, councils will take over provision of tax benefits from the Government - which is to provide councils with fixed grants at about 90 per cent of the amount currently paid.
The £4.6m reduction is on top of £35m in savings the council faces next year.
Because pensioners’ benefits are protected, and OAPs make up half of the 60,000 residents receiving them in Sheffield, the cut effectively becomes 20 per cent.
For most families in a Band A council tax property the average loss will be about £3.76 a week, or £195.52 a year.
The council said the impact was ‘disproportionate’ as it affected deprived northern areas more than the wealthier south.
Concerns about the fixed grant, to be called council tax support, and potential further cuts once local schemes are created, have also been raised.
Coun Lodge added: “We will get this amount of money and that’s it for a year.
“If there is a change, like a big employer closes and a number of people lose their jobs, we don’t get any more money.
“There could be further impact.”
Extra support for households with severe financial hardship is being considered.
A spokesman for the Government’s Department of Communities and Local Government said councils would be able to keep part of business rates they collect in future, and the most vulnerable people, like pensioners, will be protected.
He added: “Councils will be much better placed to attract new business and industry, and better placed to help their residents get off welfare and reap the benefits of work instead.”
The Sheffield consultation runs until September 17 at log on to www.sheffield.gov.uk/lcts